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Fantasy modelling

From
Erik Sundström

No doubt it is possible to find a mathematical model to predict stock market developments (27 September, p 5 and p 8) – but only on the assumption that your actions do not influence the market. If you are a significant player in the market your actions – based on your model – do influence it, and your choice of model will be part of the market, and another model will be optimal.

If your competitors use the same model as you, yet another model would be optimal, and the likelihood of instability is very great.